Mixed reactions to Public Protector Busisiwe Mkhwebane’s CIEX report

PUBLIC Protector Busisiwe Mkhwebane has received a black lash for her recommendations to have the Constitution amended following the release of her CIEX report into a R1 billion rand Absa loan.

The Economic Freedom Fighters (EFF) welcomed Mkhwebane’s remedial action that Absa should pay back the R1.125 billion bailout it received from the apartheid government but cautioned that she did not have the power to
order Parliament to amend the Constitution.
“The EFF questions the PP’s constitutional wisdom and understanding because of her remedial action in which she
instructs Parliament to amend the Constitution in relations to the role of the Reserve Bank. No matter how
noble her proposed amendment may be, she has no power to instruct a constitutional amendment. The danger with her Constitutional amendment recommendation is that it will be refuted by the court. This will result in a general distrust in her capacity to take decisions that can stand the test of judicial review,” spokesperson Mbuyiseni Ndlozi said.

Mkhwebane released the report on Monday slamming government and the Reserve Bank (SARB) for failing to recover the billions of rand given to Absa to acquire Bankorp Limited in the early 1990s.

She said the allegations that government and the Reserve Bank improperly failed to recover from Bankorp Limited/ABSA Bank an amount of R3, 2 billion cited in the CIEX report, owed as a result of an illegal gift given to Bankorp Limited/ABSA Bank between 1986 and 1995 were substantiated.

She referred the matter to the Special Investigating Unit to recover the misappropriated public funds unlawfully given to ABSA Bank in the amount of R1.125 billion. She further said Parliament had to effect a constitutional amendment to the Reserve Bank’s powers.

The Democratic Alliance said her recommendations went beyond her powers and would challenge it. The party’s Glynnis Breytenbach said her recommendations would have dire consequences and they would challenge them.
“The DA expresses serious disquiet at the ‘remedial action’ proposed by the Public Protector, Busisiwe Mkhwebane, in which she instructed Parliament’s Committee on Justice and Constitutional Development to amend the
Constitution in relation to the powers of the South African Reserve Bank Clearly, her recommendation goes beyond what she is legally empowered to do and is indicative of her long-term plan to render the Public Protectors office ineffective. The remedial actions announced are very disturbing and they mean that the new Public Protector has either failed to understand her role and powers as Public Protector, or she simply is prepared to break the law to drive political agendas,” she said.

Breytenbach said the DA would be watching this process carefully and are currently exploring all possible actions to address the apparent difficulties with the remedial action in its current form.

Former Reserve Bank governor Tito Mboweni also cautioned Mkhwebane about meddling in the role of the central bank and its powers. He served as governor of the SA Reserve Bank from 1999-2009.

He said central banks are very important and sensitive institutions.
“When we negotiated our Sovereign Constitution, we entered into a covenant about the independence of the SA Reserve Bank. Its central objective was a long drawn negotiation process. It is unwise to try and change this at the
slightest political provocation. It is a very serious matter for our beloved country. Please think carefully about
this. I hope the PP has consulted widely about her proposals in this regard. One cannot just take this for
granted. This is too fundamental to be treated this easily. The impact of any proposed changes are huge for
our country,” he said.

Mboweni explained that one of their central tasks as central banks is to protect the stability of the banking and financial system of the economies in which they operate. To fulfill this mandate, central banks have to assess the negative impact of bank failures.
“This is a huge responsibility which must be approached with extreme care. Political considerations have to be considered, yes, but they must not be above all else. That is why political authorities entrust this responsibility (central banking) to an independent institution, the central bank,” he said.

Mboweni explained that when he assumed office he instituted an independent investigation headed by a Judge.

It comprised of a panel of highly qualified people in economics, finance, accounting and political complexities, black and white with international expertise.
“Their report was also submitted to the PP. This report, it would seem, at reading the media reports, was ignored or might have been complex. I do not want to be judgemental. On the basis of that report, and its recommendations, the matter was concluded. Yes, I must admit, that a different panel might have come to a different conclusion as these matters normally are the case. But to cast negative judgment on their genuine professional work is both ingenious
and unfair. It might be impugning on their professional standing in their professions, society, and capabilities,”
he said.

Despite the backlash, Mkhwebane has support on her calls for the amendment of the Constitution. The African National Congress Youth League said it was vindicated by the report.

Spokesperson Mlondi Mkhize said they were the first organisation’s to vociferously call for ABSA to pay the money due to South Africans by staging a massive march to their head offices. The organisation also agreed with Mkhwebane’s call for a Constitutional amendment.
“We also hope that the foreign owned South African Reserve Bank will cooperate with our institutions in making sure that all “misappropriated public funds” are recovered, we will further seek an audience with the Reserve Bank to raise other related matters. As the ANCYL we further note the proposal by the Public Protector to amend section 224 of the constitution by the Portfolio Committee on Justice and Correction Services, it is our long-held view that
the constitution as it stands doesn’t protect the poor but the rich and we have always insisted that it should be
amended in order to bring about fair redistribution of wealth and promote socio-economic transformation. We
will study the proposed submissions and make our view known,” said Mkhize.

The uMkhonto weSize Military Veterans Association also supported her call. Spokesperson Carl Niehauis said MKMVA also strongly supported the recommendation that the Constitution should be amended to specifically stipulate that the Reserve Bank’s primary objectives must include protecting citizen’s socioeconomic conditions.

“This recommendation concurs with a position that we as MKMVA have been articulating for a considerable time. It is also in line with our 5th National Conference Resolutions on Radical Socioeconomic Transformation. Our
relevant Resolution is that the Reserve Bank cannot be policy independent from government,” he said. “The government needs to exert control over the South African Reserve Bank in order to ensure that the Reserve Bank will align, support, and implement government economic transformation policy. The private ownership of shares in the Reserve Bank must cease, and government must be the sole owner of Reserve Bank shares.”

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